Prime Factor Capital was the first crypto hedge fund approved as a full-scope alternative investment fund manager by the Financial Conduct Authority, according to Bloomberg.
Though approved by the UK watchdog, the firm will abide by European regulations. Under these guidelines the firm will be allowed to hold more than 100 million euros in assets under management. It is the first agency to be approved to invest exclusively in the cryptocurrency asset class.
The founders believe that by focusing on a single asset class, even one that carries market distrust, they will surge ahead of their global competitors and become the trusted authority in crypto investing.
“Most vehicles for investing in cryptocurrencies are outside the scope of regulators and that’s a big problem in a market that has such a bad reputation,” Adam Grimsley, Prime Factor’s chief operating officer, told Bloomberg.
Prime Factor is required to appoint a custodian under EU regulations to ensure and validate investors’ returns and the fund’s holdings. This custodian will act independently of the firm and also provide cash flow reconciliation.
The firm manages funds for professional and institutional investors including high net worth individuals, family offices, and private wealth managers, according to a company statement.
There is no information available publicly regarding the firm’s investment strategy. The team is comprised of former employees from Blackrock, Legal & General, Goldman Sachs, and Deutsche Bank.
On their website, company CEO Nic Niedermowwe published a report titled “The Fallacy of Uncollateralised Stablecoins,” in which he argued that uncollateralised stablecoins are problematic. He has also considered such subjects as the scalability of bitcoin.
The company did not respond to a request for comment.
Prime Factor Capital previously announced an equity financing round with Speedinvest, a European Fintech investor, and Entrepreneur First, a talent investor.